< Return to news
ClaimForce CEO featured in Crain’s Chicago Business
(Crain's) -- Dennis O'Mahoney has set out to create an Orbitz for the insurance industry. With Orbitz, users can book flights, hotels and rental cars at one spot. Mr. O'Mahoney's company, ClaimForce Inc., provides claims representatives who use his service with online lists of auto repair shops, appraisers, car rental companies and property restoration services, rated by quality, price and time. ClaimForce aims to make it faster and more efficient for the claims reps to find the right body shop, windshield repairer and car rental agency for a customer to use who has been in an auto accident. And cheaper for the insurance company footing the bill.
A former executive with Chicago-based CCC Information Services Inc., the 40-year-old Mr. O'Mahoney started ClaimForce as its only employee in 2002. In his 10-year career with CCC, which provides software to the automotive claims industry, Mr. O'Mahoney learned firsthand about the "improvements" needed in the insurance industry. After leaving CCC and working for two years in his own one-man consulting firm, Mr. O'Mahoney decided to launch ClaimForce. Three of the company's top four executives are former CCC employees. Mr. O'Mahoney projects 2007 sales of about $2 million, and said the company is focused on growth.
"ClaimForce's effort to help insurance companies better manage their claims fits into an industry-wide push during recent years", said Bruce Zaccanti, a principal in Ernst & Young LLP's insurance and risk management consulting practice. "The entire industry over last 10 years has been very focused on improving the customer experience in the claims space," Mr. Zaccanti said. Mr. Zaccanti said he was not familiar with ClaimForce, but the company's business model is "an interesting concept." To succeed, ClaimForce will have to prove that it can lower insurance companies' vendor management costs, while keeping the companies' customers happy, he said. ClaimForce's biggest customer, which Mr. O'Mahoney declined to identify publicly, has cut its vendor procurement costs by 25%, while its claims have increased 10%, Mr. O'Mahoney said.
ClaimForce's biggest opportunity -- providing software to an industry slow to adopt technological advances -- also describes the company's biggest challenge: How do you convince companies that are often reluctant to invest in technology to do so? "A lot of insurance companies have a thick cement layer at the top that you have to break away at slowly," said Bruce Barron, principal of Northbrook-based Origin Ventures, which financially backs ClaimForce. "It's a long sales cycle to get insurance companies to start using new products." Last month, the 19-employee company was one of 13 chosen by the state out of more than 100 entrants as an "Innovate Illinois" winner, which entitled ClaimForce to a $10,000 grant and access to entrepreneurial mentoring services.
ClaimForce, based in Warrenville, also will receive a "Recognition of Excellence in Innovation" certificate from the U.S. Department of Commerce in a ceremony this month at the Chicagoland Chamber of Commerce, one of about 20 such certificates the department expects to present nationwide this year, a department spokeswoman said. But more importantly, Mr. O'Mahoney has convinced two local venture capital firms, including Origin Ventures, to fork over a combined $5 million investment in the company.
While the key to investing in real estate is "location, location, location," the biggest factor in investing in early stage companies is "management, management, management," Mr. Barron of Origin said. ClaimForce's experienced management team, plus the demand he anticipates for its products, made the company an attractive investment. Mr. Barron said he was impressed with Mr. O'Mahoney while the two were negotiating the Origin-ClaimForce deal. "He did what was best for the company and not what was necessarily best for himself."
A former executive with Chicago-based CCC Information Services Inc., the 40-year-old Mr. O'Mahoney started ClaimForce as its only employee in 2002. In his 10-year career with CCC, which provides software to the automotive claims industry, Mr. O'Mahoney learned firsthand about the "improvements" needed in the insurance industry. After leaving CCC and working for two years in his own one-man consulting firm, Mr. O'Mahoney decided to launch ClaimForce. Three of the company's top four executives are former CCC employees. Mr. O'Mahoney projects 2007 sales of about $2 million, and said the company is focused on growth.
"ClaimForce's effort to help insurance companies better manage their claims fits into an industry-wide push during recent years", said Bruce Zaccanti, a principal in Ernst & Young LLP's insurance and risk management consulting practice. "The entire industry over last 10 years has been very focused on improving the customer experience in the claims space," Mr. Zaccanti said. Mr. Zaccanti said he was not familiar with ClaimForce, but the company's business model is "an interesting concept." To succeed, ClaimForce will have to prove that it can lower insurance companies' vendor management costs, while keeping the companies' customers happy, he said. ClaimForce's biggest customer, which Mr. O'Mahoney declined to identify publicly, has cut its vendor procurement costs by 25%, while its claims have increased 10%, Mr. O'Mahoney said.
ClaimForce's biggest opportunity -- providing software to an industry slow to adopt technological advances -- also describes the company's biggest challenge: How do you convince companies that are often reluctant to invest in technology to do so? "A lot of insurance companies have a thick cement layer at the top that you have to break away at slowly," said Bruce Barron, principal of Northbrook-based Origin Ventures, which financially backs ClaimForce. "It's a long sales cycle to get insurance companies to start using new products." Last month, the 19-employee company was one of 13 chosen by the state out of more than 100 entrants as an "Innovate Illinois" winner, which entitled ClaimForce to a $10,000 grant and access to entrepreneurial mentoring services.
ClaimForce, based in Warrenville, also will receive a "Recognition of Excellence in Innovation" certificate from the U.S. Department of Commerce in a ceremony this month at the Chicagoland Chamber of Commerce, one of about 20 such certificates the department expects to present nationwide this year, a department spokeswoman said. But more importantly, Mr. O'Mahoney has convinced two local venture capital firms, including Origin Ventures, to fork over a combined $5 million investment in the company.
While the key to investing in real estate is "location, location, location," the biggest factor in investing in early stage companies is "management, management, management," Mr. Barron of Origin said. ClaimForce's experienced management team, plus the demand he anticipates for its products, made the company an attractive investment. Mr. Barron said he was impressed with Mr. O'Mahoney while the two were negotiating the Origin-ClaimForce deal. "He did what was best for the company and not what was necessarily best for himself."
